Altria Group, Inc. Reports 2006 Second-Quarter Results

-- Reported Diluted Earnings Per Share from Continuing Operations Down 7.9% to $1.29 vs. $1.40 in Year-Ago Quarter

-- Excluding Items Detailed in Table Below, Diluted Earnings Per Share from Continuing Operations Up 6.8% to $1.41 vs. $1.32 in Year-Ago Quarter

-- Forecast Raised To A Range of $5.40 to $5.50 For 2006 Full-Year Diluted Earnings Per Share from Continuing Operations

Altria Group, Inc. (NYSE: MO) today announced second-quarter 2006reported diluted earnings per share from continuing operations of$1.29, including items detailed on the attached Schedule 7, versus$1.40 in the year-ago period.

"Our second quarter results were solid in all respects, and we arewitnessing an improvement in underlying fundamentals across all ourbusinesses. While the global economic outlook continues to be a sourceof concern, we look forward to continued momentum in the second halfof the year," said Louis C. Camilleri, chairman and chief executiveofficer of Altria Group, Inc. "Our domestic tobacco business continuedto increase its market share, driven by gains for both Marlboro andParliament. Our international tobacco business achieved strong sharegains in France, Germany and Italy, and benefited from acquisitions.Our food business made continued progress, with good top-line growthand solid income performance."

Excluding items shown in the table below, 2006 second-quarterdiluted earnings per share from continuing operations increased 6.8%.
Q2 2006 Q2 2005 Change
------- ------- -------

Reported diluted EPS from continuing
operations $ 1.29 $ 1.40 (7.9%)

2005 tax items, net of minority interest
impact -- (0.11)

Asset impairment and exit costs,
net of minority interest impact 0.09 0.03

Provision for airline industry exposure 0.03 --
------ ------

Diluted EPS, excluding above items $ 1.41 $ 1.32 6.8%

As shown in the reconciliation on Schedule 7, the 7.9% decline inreported diluted earnings per share from continuing operations was dueprimarily to an unfavorable comparison with the year-ago period, whichbenefited from $0.11 per share in tax benefits, primarily related tothe American Jobs Creation Act (AJCA), higher Kraft restructuringcharges for the second quarter of 2006 versus 2005, and an increase inthe allowance for losses related to the airline industry at PhilipMorris Capital Corporation (PMCC).

2006 Full-Year Forecast

Altria Group raised its previously announced projection for 2006full-year diluted earnings per share from continuing operations from arange of $5.25 to $5.35 to a range of $5.40 to $5.50. This changereflects Kraft's anticipated gain on the redemption of its interest inUnited Biscuits (benefiting Altria by approximately $0.09 per share),Kraft's forecast for lower than expected restructuring charges for thefull year (negatively impacting Altria by approximately $0.28 pershare versus $0.36 per share in previous guidance), and a charge of$0.03 per share for the increase in the allowance for losses relatedto the airline industry at PMCC. The factors described in theForward-Looking and Cautionary Statements section of this releaserepresent continuing risks to this projection.

Conference Call

A conference call with members of the investment community andnews media will be Webcast at 9:00 a.m. Eastern Time on July 25, 2006.Access is available at www.altria.com.

ALTRIA GROUP, INC.

As described in "Note 15. Segment Reporting" of Altria Group,Inc.'s 2005 Annual Report, management reviews operating companiesincome, which is defined as operating income before corporate expensesand amortization of intangibles, to evaluate segment performance andallocate resources. Management believes it is appropriate to disclosethis measure to help investors analyze business performance andtrends. For a reconciliation of operating companies income tooperating income, see the Condensed Statements of Earnings containedin this release.

All references in this news release are to continuing operations,unless otherwise noted.

2006 Second-Quarter Results

Net revenues for the second quarter of 2006 increased 4.0% versus2005 to $25.8 billion, including $484 million from acquisitions offsetby unfavorable currency of $450 million.

Operating income decreased 1.5% to $4.4 billion, reflecting theitems described in the attached reconciliation on Schedule 3,including $247 million in charges for asset impairment and exit costs,primarily at Kraft, an increase of $103 million in the allowance forlosses related to the airline industry at PMCC and unfavorablecurrency of $67 million. These were partially offset by higher resultsfrom operations of $227 million, and the positive impact fromacquisitions of $81 million, primarily Sampoerna.

Earnings from continuing operations decreased 6.9% to $2.7billion, reflecting the factors mentioned above and favorable taxitems of $227 million, or $0.11 per share, in the second quarter of2005, primarily due to the repatriation of $6.0 billion of earningsunder provisions of the AJCA. The company's effective tax rate was33.6% in the second quarter of 2006 compared to 28.7% for the sameperiod in 2005, which reflected the dividend repatriation under theAJCA.

Net earnings, including discontinued operations, increased 1.6% to$2.7 billion, aided by a favorable comparison with the second quarterof 2005, when Altria recorded a $245 million net loss fromdiscontinued operations, net of minority interest, as a result ofKraft's sale of its sugar confectionery business. Diluted earnings pershare, including discontinued operations as detailed on Schedule 1,increased 0.8% to $1.29, driven by the factors mentioned above.

During the second quarter of 2006, Altria Group, Inc. declared aregular quarterly dividend of $0.80 per common share, which representsan annualized rate of $3.20 per common share.

DOMESTIC TOBACCO

2006 Second-Quarter Results

For the second quarter of 2006, Philip Morris USA (PM USA), AltriaGroup, Inc.'s domestic tobacco business, delivered solid income growthand strong share performance, driven by Marlboro and Parliament.

Operating companies income increased 3.2% to $1.3 billion,primarily driven by lower wholesale and retail promotional allowancerates, partially offset by lower volume.

Shipment volume of 47.2 billion units was down 4.3% from theprevious year, reflecting changes in wholesale and retail tradeinventory levels and the timing of 4th of July trade purchases versusthe year-ago period. Adjusting for those factors, PM USA estimatesthat shipment volume declined approximately 2.0% in the second quarterof 2006 versus the second quarter of 2005. Premium mix for PM USAincreased by 0.4 percentage points to 92.0% in the second quarter of2006.

As shown in the following table, PM USA's total retail shareincreased to 50.5% in the second quarter of 2006, driven by Marlboroand Parliament.

Philip Morris USA Quarterly Retail Share*
-----------------------------------------
Q2 2006 Q2 2005 Change
------------------------
Marlboro 40.6% 40.0% 0.6 pp
Parliament 1.9% 1.7% 0.2 pp
Virginia Slims 2.3% 2.3% 0.0 pp
Basic 4.2% 4.3% -0.1 pp
------------------------
Focus Brands 49.0% 48.3% 0.7 pp
Other PM USA 1.5% 1.7% -0.2 pp
------------------------
Total PM USA 50.5% 50.0% 0.5 pp

* IRI/Capstone Total Retail Panel was developed to measure market
share in retail stores selling cigarettes. It is not designed to
capture Internet or direct mail sales.

PM USA's share of the premium category was up 0.1 share points to62.1%, while its share of the discount category grew 0.3 share pointsto 16.7%. The total industry's premium category share increased 0.9points to 74.6% in the second quarter of 2006, while the discountcategory share correspondingly declined to 25.4%. Within the discountcategory, share of the deep discount segment (which includes bothmajor manufacturers' private label brands and all other manufacturers'discount brands) declined 0.5 points to 11.3%.

As part of its tobacco category adjacency growth strategy todevelop new revenue and income sources for the future, PM USA begantest marketing a smoke-free and spit-free tobacco pouch product,called Taboka, designed especially for adult smokers interested insmokeless tobacco alternatives to smoking. Taboka Tobaccopaks(TM) comein two versions - Taboka Original and Taboka Green, which is a mentholversion. PM USA began test marketing Taboka in the Indianapolis areain early July.

On June 19, the Illinois Supreme Court, with consent from bothparties, ordered the return to PM USA of the approximately $2.15billion in cash securing the appeal bond in the Price "Lights" case. A$6 billion note, which also secured the 2003 judgment, will bereturned to the company if the U.S. Supreme Court declines to hear theplaintiffs' appeal. PM USA's obligations to deposit payments on thenote and to pay administrative fees to the Madison County, Illinoisclerk also were terminated by the court's order on June 19.

INTERNATIONAL TOBACCO

2006 Second-Quarter Results

Philip Morris International Inc. (PMI), Altria Group, Inc.'sinternational tobacco business, delivered strong volume and incomeperformance in the second quarter of 2006, despite the challengingenvironment in Spain.

Cigarette shipment volume increased 5.7% to 213.9 billion units.The impact of acquisitions in Indonesia and Colombia, and favorabletiming of shipments in Italy, coupled with solid gains in Argentina,France, Poland, Ukraine and worldwide duty-free, were partially offsetby declines in Portugal and Spain, as well as Japan and Russia due tounfavorable timing of shipments. Excluding acquisitions, PMI'scigarette shipment volume was up 0.8%. PMI's total tobacco volume,which included 2.2 billion cigarette equivalent units of other tobaccoproducts (OTPs), grew 6.0% to 216.1 billion units.

Operating companies income was up 5.7% to $2.1 billion, dueprimarily to higher pricing and the favorable impact of acquisitionsof $81 million, partially offset by a negative currency impact of $68million.

PMI's market share in the second quarter of 2006 advanced in manycountries, with gains achieved in several major markets includingArgentina, Austria, Belgium, Brazil, Egypt, France, Germany, Hungary,Indonesia, Italy, Korea, Malaysia, Mexico, the Philippines, Poland,Switzerland, Turkey and Ukraine.

Total Marlboro cigarette shipments of 81.6 billion units were down2.0%, due mainly to the impact of the timing of shipments in Japan, aswell as lower volume in Germany and Argentina. Marlboro market shareswere up in Australia, Brazil, France, Greece, Hungary, Italy, Japan,Korea, Kuwait, Malaysia, Mexico, the Philippines, Russia, Saudi Arabiaand Ukraine. PMI recently launched Marlboro Wides in Portugal, Franceand Spain, and plans additional market introductions later this year.

In the European Union (EU) region, PMI's cigarette shipments wereup 0.8%, as gains in France and Poland, and the favorable timing ofshipments in Italy, were largely offset by declines in Spain, Germanyand Portugal. PMI's cigarette market share in the EU region was 39.3%,down 0.2 points as strong share performances in France, Germany, Italyand Poland were offset by declines in the Czech Republic, Portugal andSpain. Importantly, PMI's share of total tobacco consumption(cigarettes and OTPs) in the EU was up 0.4 points to 35.4%.

In Germany, total tobacco consumption declined 5.6%, but PMI'stotal tobacco shipments were up 1.2%. PMI's share of total tobaccoconsumption increased 2.0 points to 30.8%, representing sequentialshare growth for the third consecutive quarter. The total cigarettemarket declined 7.8%, while PMI's cigarette volume was down 6.1%,resulting in PMI's cigarette market share rising 0.7 points to 37.6%,driven by L&M. Industry volume for tobacco portions declined 14.4% to4.7 billion units in the second quarter and PMI's share of tobaccoportions rose 11.0 points to 25.1%. As of April 2006, tobacco portionscan no longer be manufactured under favorable tax conditions inGermany. However, the retail availability of tobacco portions isexpected to remain through the third quarter of this year.

In Italy, the total cigarette market declined 1.5%, primarilyreflecting two less selling days versus the prior-year quarter. PMI'sreported shipment volume was up 19.8%, helped by the timing ofshipments and a favorable comparison with the second quarter of 2005,when PMI's new distributor in Italy reduced its inventory by 1.0billion units. Market share in Italy rose 0.9 points to 53.6%, drivenby Chesterfield and Marlboro, which increased 0.5 share points to22.8%.

In France, PMI's volume and share performed strongly, reflecting astable pricing environment and moderate price gaps. Shipments rose10.9% and share grew 1.1 points to 42.8% behind the continued successof Marlboro and the Philip Morris brand.

In Spain, the total cigarette market declined 2.5%, but wasessentially flat when adjusted for two less selling days in the secondquarter of 2006, and reflects some recovery after the first quarterimpact of the new tobacco law implemented on January 1. PMI'scigarette shipments were down 14.2%, driven by the lower industry,unfavorable inventory movements and market share, which was 3.0 pointslower at 31.6%. On a sequential basis, PMI's market share has beenresilient over the past three quarters at approximately 32%. Most ofPMI's share losses, compared to last year's second quarter, were theresult of declines in Chesterfield in the medium-price category andL&M in the low-price category. Premium-price Marlboro's share in thesecond quarter was down a more moderate 0.3 share points to 16.7%,while Chesterfield and L&M were impacted by the repositioning of acompetitive brand from the premium-price segment to the low-pricesegment. In addition, PMI's share was impacted by the continuedavailability of competitive brands in the super-low segment, priced aslow as 1.85 euros for a pack of 20 cigarettes. However, PMI believesthat over time its strong brand portfolio will steadily regain marketshare losses in Spain.

In the Czech Republic, the total market was essentially flat.PMI's shipments were down 12.3% and share was lower, reflectingintense price competition. In Portugal, the total market was down11.2%, due primarily to lower overall consumption and highercross-border purchases in Spain. PMI's shipments declined 16.1% inPortugal and share was down 4.7 points to 79.7%, due to severe pricecompetition and excise tax absorption by some manufacturers.

In Eastern Europe, the Middle East and Africa, PMI's shipmentsgrew 0.6%, due mainly to continued gains in Ukraine as well as severalNorth African markets, largely offset by lower shipments in Russia andTurkey. Shipments in Russia were down 2.1%, driven by unfavorabledistributor inventory movements versus the prior-year quarter anddeclines for local lower-margin offerings, as well as L&M, partiallyoffset by gains for Marlboro, Muratti and Parliament. In Turkey,shipments were down 4.3%. However, market share rose 2.1 points to42.6%, driven mainly by the continued success of Lark, partiallyoffset by a decline in low-price Bond Street. In Ukraine, shipmentsrose 5.8%, while market share increased 0.6 points to 32.7%, driven bythe continued growth of Marlboro and Chesterfield.

In Asia (including Japan), volume increased 20.5%, driven by theacquisition of Sampoerna in Indonesia. Excluding the acquisition,volume was down 2.4%, due primarily to a difficult comparison with theprior-year quarter in Japan.

In Japan, the total market was inflated by trade loading patternsand rose 13.8%, reflecting trade purchasing ahead of a tax-drivenprice increase on July 1, 2006. PMI's in-market sales were up 12.7%,also reflecting trade purchasing in advance of the July priceincrease. Market share declined 0.2 points to 24.4%, althoughMarlboro's share was up 0.2 points to 9.8%. Shipments were down 1.1billion units or 5.7%, reflecting an unfavorable comparison due todistributor inventory movements related to the return of the Marlborolicense in Japan in May 2005.

In Indonesia, PMI achieved a 27.5% share in the second quarter, up1.9 share points on a pro forma basis versus the prior-year quarter,demonstrating the continued strength of its brand portfolio, led by AMild, Dji Sam Soe and A Hijau.

PMI's volume in Latin America increased 10.1%, due to goodperformances in Argentina and Mexico, as well as the acquisition ofColtabaco in Colombia. Excluding that acquisition, volume advanced6.0%. The total market in Argentina was up 10.2%, while PMI'sshipments grew 17.5% and share was up 4.1 points to 66.2%, driven bythe price repositioning of the Philip Morris brand and the recentlaunch of Next in the ultra low-price segment. In Mexico, PMIshipments and market share advanced versus the prior-year quarter,driven by the continued momentum of Marlboro and Benson & Hedges.

FOOD

2006 Second-Quarter Results

Yesterday, Kraft Foods Inc. (Kraft) reported 2006 second-quarterresults. Kraft's net revenues were up 3.4% to $8.6 billion, reflectingpositive product mix, the impact of price increases and gains inEastern Europe and Latin America, as well as solid growth in NorthAmerica, partially offset by the impact of divestitures, as well asunfavorable currency of $32 million.

Ongoing volume growth of 0.9% included gains in cheese, meats andcoffee. Volume growth also included an estimated one percentage pointbenefit from the shift in timing of Easter shipments versus last year.In addition, the impact of product item pruning and thediscontinuation of select product lines represented approximately 2%of prior-year volume.

Operating income decreased 5.8% to $1.2 billion for the secondquarter, due to higher asset impairment, exit and implementationcosts. However, excluding those costs and gains/losses on the sale ofbusinesses, operating income increased 9.3% and operating incomemargin increased to 16.6% from 15.7%. These gains were driven by netrevenue growth and cost savings. Higher packaging and energy costspartially offset the expansion in operating income margins.

NORTH AMERICAN FOOD

2006 Second-Quarter Results

For the second quarter 2006, Kraft North America Commercial (KNAC)net revenues were up 3.4% to $5.9 billion, reflecting increases inConvenient Meals, Snacks & Cereals, Beverages and Cheese & Foodserviceand favorable currency of $48 million, partially offset by declines inGrocery. Ongoing volume increased 1.0% due to higher volume in Cheese& Foodservice, Convenient Meals, Grocery and Snacks & Cereals,partially offset by decreases in Beverages, driven largely by theimpact of discontinued products. Operating companies income decreased1.5% to $1.0 billion, with higher asset impairment and exit costs onlypartially offset by productivity and restructuring savings, positivemix, and favorable currency of $8 million.

INTERNATIONAL FOOD

2006 Second-Quarter Results

For the second quarter 2006, net revenues for Kraft InternationalCommercial (KIC) increased 3.5% to $2.7 billion, reflecting increasesin Developing Markets, Oceania & North Asia, partially offset byunfavorable currency of $80 million. Ongoing volume was up 0.5%, withan increase in the European Union partially offset by a slight declinein Developing Markets, Oceania & North Asia. Operating companiesincome decreased 25.5% to $184 million, due to higher restructuringand impairment charges, as well as unfavorable currency of $7 million,partially offset by positive mix and price increases.

FINANCIAL SERVICES

2006 Second-Quarter Results

Philip Morris Capital Corporation (PMCC) reported an operatingcompanies loss of $59 million for the second quarter of 2006, versusoperating companies income of $70 million for the year-earlier period.Results reflect an increase of $103 million in the allowance forlosses related to continuing issues within the airline industry.Consistent with its strategic shift in 2003, PMCC is focused onmanaging its existing portfolio of finance assets in order to maximizegains and generate cash flow from asset sales and related activities.PMCC is no longer making new investments and expects that itsoperating companies income will fluctuate over time as leases matureor assets are sold.

Altria Group, Inc. Profile

Altria Group, Inc. owns approximately 88.1% of the outstandingcommon shares of Kraft Foods Inc. and 100% of the outstanding commonshares of Philip Morris International Inc., Philip Morris USA Inc. andPhilip Morris Capital Corporation. In addition, Altria Group, Inc.owns approximately 28.7% of SABMiller plc. The brand portfolio ofAltria Group, Inc.'s consumer packaged goods companies includes suchwell-known names as Kraft, Jacobs, L&M, Marlboro, Maxwell House,Nabisco, Oreo, Oscar Mayer, Parliament, Philadelphia, Post andVirginia Slims. Altria Group, Inc. recorded 2005 net revenues of $97.9billion.

Trademarks and service marks mentioned in this release are theregistered property of, or licensed by, the subsidiaries of AltriaGroup, Inc.

Forward-Looking and Cautionary Statements

This press release contains projections of future results andother forward-looking statements that involve a number of risks anduncertainties and are made pursuant to the Safe Harbor Provisions ofthe Private Securities Litigation Reform Act of 1995. The followingimportant factors could cause actual results and outcomes to differmaterially from those contained in such forward-looking statements.

Altria Group, Inc.'s consumer products subsidiaries are subject tochanging prices for raw materials; intense price competition; changesin consumer preferences and demand for their products; fluctuations inlevels of customer inventories; the effects of foreign economies andlocal economic and market conditions; unfavorable currency movementsand changes to income tax laws. Their results are dependent upon theircontinued ability to promote brand equity successfully; to anticipateand respond to new consumer trends; to develop new products andmarkets and to broaden brand portfolios in order to competeeffectively with lower-priced products; to improve productivity; andto respond effectively to changing prices for their raw materials.

Altria Group, Inc.'s tobacco subsidiaries (Philip Morris USA andPhilip Morris International) continue to be subject to litigation,including risks associated with adverse jury and judicialdeterminations, courts reaching conclusions at variance with thecompany's understanding of applicable law, bonding requirements andthe absence of adequate appellate remedies to get timely relief fromany of the foregoing; price gaps and changes in price gaps betweenpremium and lowest-price brands; legislation, including actual andpotential excise tax increases; discriminatory excise tax structures;increasing marketing and regulatory restrictions; the effects of priceincreases related to excise tax increases and concluded tobaccolitigation settlements on consumption rates and consumer preferenceswithin price segments; health concerns relating to the use of tobaccoproducts and exposure to environmental tobacco smoke; governmentalregulation; privately imposed smoking restrictions; and governmentaland grand jury investigations.

Altria Group, Inc. and its subsidiaries are subject to other risksdetailed from time to time in its publicly filed documents, includingits Quarterly Report on Form 10-Q for the period ended March 31, 2006.Altria Group, Inc. cautions that the foregoing list of importantfactors is not complete and does not undertake to update anyforward-looking statements that it may make.
ALTRIA GROUP, INC. Schedule 1
and Subsidiaries
Condensed Statements of Earnings
For the Quarters Ended June 30,
(in millions, except per share data)
(Unaudited)

2006 2005 % Change
---------------------------
Net revenues $25,769 $24,784 4.0 %
Cost of sales 9,393 9,134 2.8 %
Excise taxes on products (*) 7,895 7,459 5.8 %
-----------------
Gross profit 8,481 8,191 3.5 %
Marketing, administration and research
costs 3,516 3,478
Domestic tobacco headquarters relocation
charges - 2
Asset impairment and exit costs 247 50
Losses on sales of businesses, net 8 1
Provision for airline industry exposure 103 -
-----------------
Operating companies income 4,607 4,660 (1.1)%
Amortization of intangibles 9 4
General corporate expenses 163 165
Asset impairment and exit costs 32 20
-----------------
Operating income 4,403 4,471 (1.5)%
Interest and other debt expense, net 266 320
-----------------
Earnings from continuing operations
before income taxes, minority
interest, and equity earnings, net 4,137 4,151 (0.3)%
Provision for income taxes 1,388 1,192 16.4 %
-----------------
Earnings from continuing operations
before minority interest and equity
earnings, net 2,749 2,959 (7.1)%
Minority interest in earnings from
continuing operations, and equity
earnings, net 38 47
-----------------
Earnings from continuing operations 2,711 2,912 (6.9)%
Loss from discontinued operations, net of
income taxes and minority interest** - (245)
-----------------
Net earnings $ 2,711 $ 2,667 1.6 %
=================

Per share data(***):
Basic earnings per share from continuing
operations $ 1.30 $ 1.41 (7.8)%
Basic earnings per share from
discontinued operations $ - $ (0.12)
-----------------
Basic earnings per share $ 1.30 $ 1.29 0.8 %
=================

Diluted earnings per share from
continuing operations $ 1.29 $ 1.40 (7.9)%
Diluted earnings per share from
discontinued operations $ - $ (0.12)
-----------------
Diluted earnings per share $ 1.29 $ 1.28 0.8 %
=================
Weighted average number of
shares outstanding - Basic 2,085 2,067 0.9 %
- Diluted 2,102 2,087 0.7 %

(*) The detail of excise taxes on products sold is as follows:

2006 2005
-----------------
Domestic tobacco $ 931 $ 971
International tobacco 6,964 6,488
-----------------
Total excise taxes $ 7,895 $ 7,459
=================

(**) Discontinued operations in 2005 includes $(255) from loss on
sale, and $10 of earnings, net of minority interest impact.

(***) Basic and diluted earnings per share are computed for each
of the periods presented. Accordingly, the sum of the quarterly
earnings per share amounts may not agree to the year-to-date amounts.




ALTRIA GROUP, INC. Schedule 2
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended June 30,
(in millions)
(Unaudited)
North
Domestic International American International
tobacco tobacco food food
------------------------------------------------
2006 Net Revenues $ 4,785 $12,310 $ 5,945 $ 2,674
2005 Net Revenues 4,790 11,565 5,751 2,583
% Change (0.1)% 6.4% 3.4% 3.5%

Reconciliation:
---------------
2005 Net Revenues $ 4,790 $11,565 $ 5,751 $ 2,583
Divested businesses -
2005 - - (87) (5)
Divested businesses -
2006 - - 3 -
Implementation - 2005 - - 1 -
Implementation - 2006 - - - -
Acquired businesses - 484 - -
Currency - (418) 48 (80)
Operations (5) 679 229 176
------------------------------------------------
2006 Net Revenues $ 4,785 $12,310 $ 5,945 $ 2,674
================================================

Financial
services Total
-----------------------
2006 Net Revenues $ 55 $25,769
2005 Net Revenues 95 24,784
% Change (42.1)% 4.0%

Reconciliation:
---------------------
2005 Net Revenues $95 $24,784
Divested businesses -
2005 - (92)
Divested businesses -
2006 - 3
Implementation - 2005 - 1
Implementation - 2006 - -
Acquired businesses - 484
Currency - (450)
Operations (40) 1,039
-----------------------
2006 Net Revenues $ 55 $25,769
=======================

Note: The detail of excise taxes on products sold is as follows:

2006 2005
-----------------------
Domestic tobacco $ 931 $ 971
International tobacco 6,964 6,488
-----------------------
Total excise taxes $ 7,895 $ 7,459
=======================
Currency decreased international tobacco excise taxes by $228 million.


ALTRIA GROUP, INC. Schedule 3
and Subsidiaries
Selected Financial Data by Business Segment
For the Quarters Ended June 30,
(in millions)
(Unaudited)



North
Domestic International American International
tobacco tobacco food food
-----------------------------------------------
2006 Operating
Companies Income $ 1,301 $ 2,139 $ 1,042 $ 184
2005 Operating
Companies Income 1,261 2,024 1,058 247
% Change 3.2% 5.7% (1.5)% (25.5)%

Reconciliation:
---------------
2005 Operating
Companies Income $ 1,261 $ 2,024 $ 1,058 $ 247

Divested businesses -
2005 - - 2 -
Domestic tobacco
headquarters
relocation charges -
2005 2 - - -
Asset impairment and
exit costs - 2005 - 21 5 24
Losses on sales of
businesses - 2005 - - 1 -
Implementation costs -
2005 - - 18 8
-----------------------------------------------
2 21 26 32
-----------------------------------------------

Divested businesses -
2006 - - - -
Asset impairment and
exit costs - 2006 - (21) (120) (106)
Losses on sales of
businesses - 2006 - - (8) -
Implementation costs -
2006 - - (10) (7)
Provision for airline
industry exposure -
2006 - - - -
-----------------------------------------------
- (21) (138) (113)
-----------------------------------------------

Acquired businesses - 81 - -
Currency - (68) 8 (7)
Operations 38 102 88 25
-----------------------------------------------
2006 Operating
Companies Income $ 1,301 $ 2,139 $ 1,042 $ 184
===============================================

Financial
services Total
-----------------------
2006 Operating
Companies Income $ (59) $ 4,607
2005 Operating
Companies Income 70 4,660
% Change NA (1.1)%

Reconciliation:
---------------
2005 Operating
Companies Income $ 70 $ 4,660

Divested businesses -
2005 - 2
Domestic tobacco
headquarters
relocation charges -
2005 - 2
Asset impairment and
exit costs - 2005 - 50
Losses on sales of
businesses - 2005 - 1
Implementation costs -
2005 - 26
-----------------------
- 81
-----------------------

Divested businesses -
2006 - -
Asset impairment and
exit costs - 2006 - (247)
Losses on sales of
businesses - 2006 - (8)
Implementation costs -
2006 - (17)
Provision for airline
industry exposure -
2006 (103) (103)
-----------------------
(103) (375)
-----------------------

Acquired businesses - 81
Currency - (67)
Operations (26) 227
-----------------------
2006 Operating
Companies Income $ (59) $ 4,607
=======================




ALTRIA GROUP, INC. Schedule 4
and Subsidiaries
Condensed Statements of Earnings
For the Six Months Ended June 30,
(in millions, except per share data)
(Unaudited)

2006 2005 % Change
---------------------------

Net revenues $50,124 $48,402 3.6 %
Cost of sales 18,308 17,805 2.8 %
Excise taxes on products (*) 15,441 14,615 5.7 %
-----------------
Gross profit 16,375 15,982 2.5 %
Marketing, administration and research
costs 6,903 6,874
Domestic tobacco headquarters relocation
charges - 3
Italian antitrust charge 61 -
Asset impairment and exit costs 451 203
Losses (gains) on sales of businesses,
net 11 (115)
Provision for airline industry exposure 103 -
-----------------
Operating companies income 8,846 9,017 (1.9)%
Amortization of intangibles 16 8
General corporate expenses 316 324
Asset impairment and exit costs 32 38
-----------------
Operating income 8,482 8,647 (1.9)%
Interest and other debt expense, net 509 601
-----------------
Earnings from continuing operations
before income taxes, minority
interest, and equity earnings, net 7,973 8,046 (0.9)%
Provision for income taxes 1,677 2,483 (32.5)%
-----------------
Earnings from continuing operations
before minority interest and
equity earnings, net 6,296 5,563 13.2 %
Minority interest in earnings from
continuing operations, and equity
earnings, net 108 67
-----------------
Earnings from continuing operations 6,188 5,496 12.6 %
Loss from discontinued operations, net of
income taxes and minority interest(**) - (233)
-----------------
Net earnings $ 6,188 $ 5,263 17.6 %
=================

Per share data (***):
Basic earnings per share from continuing
operations $ 2.97 $ 2.66 11.7 %
Basic earnings per share from
discontinued operations $ - $ (0.11)
-----------------
Basic earnings per share $ 2.97 $ 2.55 16.5 %
=================

Diluted earnings per share from
continuing operations $ 2.94 $ 2.64 11.4 %
Diluted earnings per share from
discontinued operations $ - $ (0.11)
-----------------
Diluted earnings per share $ 2.94 $ 2.53 16.2 %
=================
Weighted average number of
shares outstanding - Basic 2,083 2,064 0.9 %
- Diluted 2,102 2,084 0.9 %

(*) The detail of excise taxes on products sold is as follows:

2006 2005
-----------------
Domestic tobacco $ 1,786 $ 1,816
International tobacco 13,655 12,799
-----------------
Total excise taxes $15,441 $14,615
=================

(**) Discontinued operations in 2005 includes $(255) from loss on
sale and $22 of earnings, net of minority interest impact

(***) Basic and diluted earnings per share are computed for each
of the periods presented. Accordingly, the sum of the quarterly
earnings per share amounts may not agree to the year-to-date amounts.



ALTRIA GROUP, INC. Schedule 5
and Subsidiaries
Selected Financial Data by Business Segment
For the Six Months Ended June 30,
(in millions)
(Unaudited)


North
Domestic International American International
tobacco tobacco food food
-----------------------------------------------
2006 Net Revenues $ 9,108 $24,111 $11,588 $ 5,154
2005 Net Revenues 8,936 22,910 11,304 5,089
% Change 1.9% 5.2% 2.5% 1.3%

Reconciliation:
---------------
2005 Net Revenues $ 8,936 $22,910 $11,304 $ 5,089
Divested businesses -
2005 - - (210) (22)
Divested businesses -
2006 - - 18 -
Implementation - 2005 - - 1 -
Implementation - 2006 - - - -
Acquired businesses - 1,192 - -
Currency - (1,072) 72 (199)
Operations 172 1,081 403 286
-----------------------------------------------
2006 Net Revenues $ 9,108 $24,111 $11,588 $ 5,154
===============================================

Financial
services Total
-----------------------
2006 Net Revenues $ 163 $50,124
2005 Net Revenues 163 48,402
% Change - 3.6%

Reconciliation:
---------------
2005 Net Revenues $ 163 $48,402
Divested businesses -
2005 - (232)
Divested businesses -
2006 - 18
Implementation - 2005 - 1
Implementation - 2006 - -
Acquired businesses - 1,192
Currency - (1,199)
Operations - 1,942
-----------------------
2006 Net Revenues $ 163 $50,124
=======================

Note: The detail of excise taxes on products sold is as follows:

2006 2005
-----------------------
Domestic tobacco $ 1,786 $ 1,816
International tobacco 13,655 12,799
-----------------------
Total excise taxes $15,441 $14,615
=======================
Currency decreased international tobacco excise taxes by $589 million.



ALTRIA GROUP, INC. Schedule 6
and Subsidiaries
Selected Financial Data by Business Segment
For the Six Months Ended June 30,
(in millions)
(Unaudited)


North
Domestic International American International
tobacco tobacco food food
-----------------------------------------------
2006 Operating
Companies Income $ 2,417 $ 4,106 $ 1,938 $ 348
2005 Operating
Companies Income 2,299 4,099 1,968 540
% Change 5.1% 0.2% (1.5)% (35.6)%

Reconciliation:
---------------
2005 Operating
Companies Income $ 2,299 $ 4,099 $ 1,968 $ 540

Divested businesses -
2005 - - (2) (3)
Domestic tobacco
headquarters
relocation charges -
2005 3 - - -
Asset impairment and
exit costs - 2005 - 24 122 57
Losses (gains) on
sales of businesses -
2005 - - 1 (116)
Implementation costs -
2005 - - 32 13
-----------------------------------------------
3 24 153 (49)
-----------------------------------------------

Divested businesses -
2006 - - (1) -
Italian antitrust
charge - 2006 - (61) - -
Asset impairment and
exit costs - 2006 - (23) (254) (174)
Losses on sales of
businesses - 2006 - - (11) -
Implementation costs -
2006 - - (17) (13)
Provision for airline
industry exposure -
2006 - - - -
-----------------------------------------------
- (84) (283) (187)
-----------------------------------------------

Acquired businesses - 227 - -
Currency - (224) 13 (19)
Operations 115 64 87 63
-----------------------------------------------
2006 Operating
Companies Income $ 2,417 $ 4,106 $ 1,938 $ 348
===============================================

Financial
services Total
-----------------------
2006 Operating
Companies Income $ 37 $ 8,846
2005 Operating
Companies Income 111 9,017
% Change (66.7)% (1.9)%

Reconciliation:
---------------
2005 Operating
Companies Income $ 111 $ 9,017

Divested businesses -
2005 - (5)
Domestic tobacco
headquarters
relocation charges -
2005 - 3
Asset impairment and
exit costs - 2005 - 203
Losses (gains) on
sales of businesses -
2005 - (115)
Implementation costs -
2005 - 45
-----------------------
- 131
-----------------------

Divested businesses -
2006 - (1)
Italian antitrust
charge - 2006 - (61)
Asset impairment and
exit costs - 2006 - (451)
Losses on sales of
businesses - 2006 - (11)
Implementation costs -
2006 - (30)
Provision for airline
industry exposure -
2006 (103) (103)
-----------------------
(103) (657)
-----------------------

Acquired businesses - 227
Currency - (230)
Operations 29 358
-----------------------
2006 Operating
Companies Income $ 37 $ 8,846
=======================



ALTRIA GROUP, INC. Schedule 7
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Quarters Ended June 30,
($ in millions, except per share data)
(Unaudited)
Diluted
Net Earnings E.P.S. (*)
------------- ---------

2006 Continuing Earnings $ 2,711 $ 1.29
2005 Continuing Earnings $ 2,912 $ 1.40
% Change (6.9)% (7.9) %

Reconciliation:
---------------
2005 Continuing Earnings $ 2,912 $ 1.40

2005 Domestic tobacco headquarters
relocation charges 1 -
2005 Asset impairment, exit and
implementation costs, net of minority
interest impact 47 0.02
2005 Losses on sales of businesses, net of
minority interest impact 1 -
2005 Corporate asset impairment and exit
costs 13 0.01
2005 Tax items, net of minority interest
impact (227) (0.11)
------------- ---------
(165) (0.08)
------------- ---------

2006 Asset impairment, exit and
implementation costs, net of minority
interest impact (159) (0.08)
2006 Losses on sales of businesses, net of
minority interest impact (3) -
2006 Corporate asset impairment and exit
costs (21) (0.01)
2006 Provision for airline industry exposure (66) (0.03)
2006 Tax items, net of minority interest
impact (2) -
------------- ---------
(251) (0.12)
------------- ---------

Currency (44) (0.02)
Change in shares - (0.01)
Change in tax rate 36 0.02
Operations 223 0.10
------------- ---------
2006 Continuing Earnings $ 2,711 $ 1.29
2006 Discontinued Earnings $ - $ -
------------- ---------
2006 Net Earnings $ 2,711 $ 1.29
============= =========

(*) Basic and diluted earnings per share are computed for each of
the periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.




ALTRIA GROUP, INC. Schedule 8
and Subsidiaries
Net Earnings and Diluted Earnings Per Share
For the Six Months Ended June 30,
($ in millions, except per share data)
(Unaudited)
Diluted
Net Earnings E.P.S. (*)
------------ ---------

2006 Continuing Earnings $ 6,188 $ 2.94
2005 Continuing Earnings $ 5,496 $ 2.64
% Change 12.6% 11.4%

Reconciliation:
---------------
2005 Continuing Earnings $ 5,496 $ 2.64

2005 Domestic tobacco headquarters
relocation charges 2 -
2005 Asset impairment, exit and
implementation costs, net of
minority interest impact 144 0.07
2005 Gains on sales of businesses, net of
minority interest impact (64) (0.03)
2005 Corporate asset impairment and exit
costs 25 0.01
2005 Tax items, net of minority interest
impact (266) (0.13)
------------ ---------
(159) (0.08)
------------ ---------

2006 Italian antitrust charge (61) (0.03)
2006 Asset impairment, exit and
implementation costs, net of
minority interest impact (284) (0.14)
2006 Losses on sales of businesses, net of
minority interest impact (6) -
2006 Corporate asset impairment and exit
costs (21) (0.01)
2006 Provision for airline industry exposure (66) (0.03)
2006 Tax items, net of minority interest
impact 965 0.46
------------ ---------
527 0.25
------------ ---------

Currency (151) (0.07)
Change in shares - (0.03)
Change in tax rate 67 0.03
Operations 408 0.20
------------ ---------
2006 Continuing Earnings $ 6,188 $ 2.94
2006 Discontinued Earnings $ - $ -
------------ ---------
2006 Net Earnings $ 6,188 $ 2.94
============ =========

(**) Basic and diluted earnings per share are computed for each of
the periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.



ALTRIA GROUP, INC. Schedule 9
and Subsidiaries
Condensed Balance Sheets
(in millions, except ratios)
(Unaudited)

June 30, December 31,
2006 2005
----------- -----------
Assets
------
Cash and cash equivalents $ 5,613 $ 6,258
All other current assets 19,818 19,523
Property, plant and equipment, net 16,876 16,678
Goodwill 32,154 31,219
Other intangible assets, net 12,194 12,196
Other assets 13,250 14,667
----------- -----------
Total consumer products assets 99,905 100,541
Total financial services assets 6,859 7,408
----------- -----------
Total assets $ 106,764 $ 107,949
=========== ===========

Liabilities and Stockholders' Equity
------------------------------------
Short-term borrowings $ 3,264 $ 2,836
Current portion of long-term debt 2,852 3,430
Accrued settlement charges 2,233 3,503
All other current liabilities 16,838 16,389
Long-term debt 14,186 15,653
Deferred income taxes 7,825 8,492
Other long-term liabilities 12,757 13,813
----------- -----------
Total consumer products liabilities 59,955 64,116
Total financial services liabilities 7,118 8,126
----------- -----------
Total liabilities 67,073 72,242
Total stockholders' equity 39,691 35,707
----------- -----------
Total liabilities and
stockholders' equity $ 106,764 $ 107,949
=========== ===========

Total consumer products debt $ 20,302 $ 21,919
Debt/equity ratio - consumer products 0.51 0.61
Total debt $ 21,611 $ 23,933
Total debt/equity ratio 0.54 0.67